Metsä Board Corporation Interim Report 1 January–31 March 2014, 13 May 2014 at 12:00 noon
Result for the first quarter of 2014
• Sales were EUR 501.2 million (1Q/2013: 535.0).
• Operating result excluding non-recurring items was EUR 36.1 million (30.2). Operating result including non-recurring items was EUR 43.5 million (34.8).
• Result before taxes excluding non-recurring items was EUR 20.8 million (3.9). Result before taxes including non-recurring items was EUR 26.0 million (8.5).
• Earnings per share excluding non-recurring items were EUR 0.06 (0.01) and including non-recurring items EUR 0.08 (0.02).
Events during the first quarter of 2014
• Metsä Board issued a EUR 225 million unsecured bond and signed an agreement on a new syndicated credit facility of EUR 250 million.
• Metsä Board announced to increase the prices of white-top and fully bleached fresh forest fibre linerboards as well as uncoated fine paper in Europe as of April.
• Metsä Board divested its property in Lielahti, Tampere to the City of Tampere for EUR 26 million.
• Metsä Board introduced new coated, fresh forest fibre based Modo Northern Light liner.
• The Court of Arbitration ordered Metsä Board to compensate approximately EUR 19.7 million to UPM-Kymmene in damages, including legal expenses, in connection with a dispute concerning Metsä Fibre Oy’s shareholder agreement.
"The year 2014 started as we had expected. Our profitability improved, and paperboard delivery volumes increased from the previous quarter in spite of the continuing uncertainty of the macroeconomy.
Folding boxboard delivery volumes increased both in Europe and outside Europe. The growth has been fastest in North America, where we have been focusing strongly in recent times. The positive development is expected to continue based on, among other things, our folding boxboard being even over 30 per cent lighter in weight than competing products. Lightness improves customers' cost competitiveness and mitigates environmental impacts.
The strong growth in the sales of fresh forest fibre linerboard has also continued. Focusing on coated linerboards in Kemi has produced excellent results, and sales of Husum's fully bleached linerboards have developed according to plans. All in all, the target for this year is to increase Metsä Board's fresh forest fibre linerboard sales by approximately 25 per cent from the previous year, to over 450,000 tonnes.
Demand for Metsä Board's paperboards is estimated to continue good in the second quarter but our profitability is burdened by the extensive maintenance shudowns at Husum integrate and at Metsä Fibre’s Joutseno and Äänekoski pulp mills.”
Mikko Helander, CEO
Key figures
| 2014 | 2013 | 2013 | 2013 | 2013 | 2013 | |
| Q1 | Q4 | Q3 | Q2 | Q1 | Q1-Q4 | |
| Sales, EUR million | 501.2 | 479.2 | 502.3 | 502.8 | 535.0 | 2,019.3 |
| EBITDA, EUR million | 69.2 | 56.7 | 44.0 | 52.7 | 61.4 | 214.8 |
| excl. non-recurring items, EUR million | 61.8 | 55.5 | 43.6 | 52.1 | 56.8 | 208.0 |
| EBITDA, % | 13.8 | 11.8 | 8.8 | 10.5 | 11.5 | 10.6 |
| excl. non-recurring items, % | 12.3 | 11.6 | 8.7 | 10.4 | 10.6 | 10.3 |
| Operating result, EUR million | 43.5 | 30.6 | 19.3 | 28.9 | 34.8 | 113.6 |
| excl. non-recurring items, EUR million | 36.1 | 29.3 | 18.9 | 26.0 | 30.2 | 104.4 |
| EBIT, % | 8.7 | 6.4 | 3.8 | 5.7 | 6.5 | 5.6 |
| excl. non-recurring items, % | 7.2 | 6.1 | 3.8 | 5.2 | 5.6 | 5.2 |
| Result before taxes, EUR million | 26.0 | 19.0 | 9.0 | 21.3 | 8.5 | 57.8 |
| excl. non-recurring items, EUR million | 20.8 | 17.8 | 8.5 | 18.5 | 3.9 | 48.6 |
| Result for the period, EUR million | 24.8 | 31.2 | 7.3 | 17.6 | 8.0 | 64.1 |
| excl. non-recurring items, EUR million | 20.6 | 29.9 | 6.8 | 15.3 | 3.4 | 55.4 |
| Result per share, EUR | 0.08 | 0.09 | 0.02 | 0.06 | 0.02 | 0.19 |
| excl. non-recurring items, EUR | 0.06 | 0.09 | 0.02 | 0.05 | 0.01 | 0.17 |
| Return on equity, % | 11.6 | 14.9 | 3.6 | 8.5 | 3.8 | 7.5 |
| excl. non-recurring items, % | 9.6 | 14.3 | 3.3 | 7.4 | 1.6 | 6.5 |
| Return on capital employed, % | 11.2 | 8.2 | 5.1 | 6.7 | 7.7 | 7.0 |
| excl. non-recurring items, % | 9.9 | 7.9 | 4.9 | 6.1 | 6.8 | 6.4 |
| Equity ratio at end of period, % | 41.0 | 40.7 | 38.7 | 32.4 | 33.3 | 40.7 |
| Gearing ratio at end of period, % | 84 | 83 | 91 | 130 | 122 | 83 |
| Net gearing ratio at end of period, % | 69 | 70 | 75 | 74 | 69 | 70 |
| Shareholders' equity per share at end of period, EUR | 2.62 | 2.59 | 2.51 | 2.48 | 2.54 | 2.59 |
| Interest-bearing net liabilities, EUR million | 592.6 | 597.2 | 622.1 | 605.9 | 577.6 | 597.2 |
| Gross investments, EUR million | 4.7 | 20.2 | 16.0 | 21.5 | 9.2 | 66.9 |
| Deliveries, 1 000 tonnes | ||||||
| Cartonboard | 219 | 209 | 225 | 220 | 217 | 872 |
| Linerboard and Paper | 265 | 250 | 247 | 250 | 279 | 1,027 |
| Personnel at the end of period | 3,145 | 3,116 | 3,178 | 3,401 | 3,239 | 3,116 |
| EBITDA = Earnings before interest, taxes, depreciation and impairment charges | ||||||
The divestment of shareholding in Metsä Group Treasury Oy in September 2013 improved Metsä Board's equity ratio by approximately 5 percentage points and return on capital employed by almost 1 percentage point and reduced the company's gross debt by more than EUR 300 million, compared to the second quarter’s actual figures in 2013.
Business environment and near-term outlook
Folding boxboard delivery volumes are estimated to increase slightly during the second quarter of 2014 compared to the previous quarter. Delivery volumes of white-top fresh forest fibre linerboard are estimated to be roughly at the level of the previous quarter. The slightly higher prices of annual folding boxboard agreements concluded in Europe at the end of last year will take full effect during the second quarter. Metsä Board has announced a white-top fresh forest fibre linerboard price increase in Europe as of April 2014.
Delivery volumes of uncoated fine paper are expected to decrease slightly in the second quarter of 2014, compared to the previous quarter, and delivery volumes of coated paper are expected to be roughly at the previous quarter's level. Metsä Board has announced an uncoated fine paper price increase in Europe as of April. No material changes in coated paper prices are in sight. The delivery volumes and average price of Metsä Board's market pulp are not expected to change materially during the second quarter of 2014.
Production costs in the second quarter of 2014 are expected to be approximately at the same level as in the previous quarter.
Metsä Board's profitability during the second quarter will be burdened by the planned annual maintenance shutdowns at the Husum mill and Metsä Fibre's Joutseno and Äänekoski pulp mills.
Metsä Board’s operating result, excluding non-recurring items, is in the second quarter of 2014 expected to weaken from the first quarter of 2014 due to the annual maintenance shutdowns at Husum mill integrate and at the associated company Metsä Fibre’s Joutseno and Äänekoski pulp mills.
Disclosure procedure
Metsä Board Corporation follows the disclosure procedure enabled by Standard 5.2b published by the Finnish Financial Supervision Authority and hereby publishes its Interim Report for January–March 2014 enclosed to this stock exchange release. Metsä Board's complete Financial Statements is attached to this release in pdf-format and is also available on the company's web site at www.metsaboard.com.
METSÄ BOARD CORPORATION
Further information:
Markus Holm, CFO, tel. +358 (0)10 465 4913
Juha Laine, Vice President, Investor Relations and Communications, tel. +358 (0)10 465 4335
More information will be available starting from 1 p.m. on 13 May 2014. A conference call held in English for investors and analysts starts at 3 p.m. (EET). Conference call participants are requested to dial in and register a few minutes prior to the start of the conference call on the following numbers:
Europe: +44 (0)20 7162 0025
US: +1 334 323 6201
The conference ID is 943100.
Metsä Board is Europe’s leading producer of folding boxboard, the world’s leading manufacturer of coated white-top fresh forest fibre kraftliners and a major paper supplier. It offers premium solutions for consumer and retail packaging, graphics and office end-uses. The company’s sales network serves brand owners, carton printers, corrugated packaging manufacturers, printers, merchants and office suppliers. Metsä Board is part of Metsä Group and its shares are listed on the NASDAQ OMX Helsinki. In 2013, the company’s sales totalled approximately EUR 2.0 billion. The company has approximately 3,100 employees.
